By Teresa Rivas
LAS VEGAS -- Sin City isn't luring enough sinners.
Visitations have been declining. Real estate prices are falling. The metro area's 5.2% unemployment rate is nearly a percentage point higher than it is nationally. But you don't need those statistics to know that all is not right in Las Vegas.
Outside, the pulsing Saturday night crowds on the Strip dwindle fast. By midweek, many pedestrians sport convention badges, showcasing one of the city's few tourism bright spots. On one block, an older man hands out fliers for an adult entertainment venue while another sits on an overturned bucket, takeaway food containers arranged like plastic soldiers at his swollen feet. The Bellagio fountains draw crowds, but elsewhere sidewalks have only sporadic foot traffic.
In the cavernous casinos, shop windows reflect on empty corridors, luxury goods sparkle unseen under spotlights. It feels like a party at the mall that ended hours before.
The reasons for the city's woes are many -- competition, inflation, geopolitics -- and many Vegas casino stocks have underperformed the S&P 500 in recent years. At first glance, it seems like Vegas could be headed for a fate worse than death; consider that Atlantic City, N.J., never got its mojo back after gambling faltered.
The travails of Las Vegas come at a time when Americans are gambling more than ever. The problem is that much of the new business is going online to sports betting sites and prediction markets. That's a big reason that Vegas has seen a drop in visitations, even as other domestic tourist destinations are having good years.
Yet the pearl-clutching (or rhinestone-clutching?) about Vegas' future overlooks the fact that the city is already working on its next act. While gambling revenue has been stagnant for decades, casinos have been offsetting it by offering other attractions, from shows to spas to world-class restaurants.
The far more important transformation is happening outside the gambling industry. Sin City is turning itself into a hub for logistics and high-tech start-ups staffed by highly educated white-collar and skilled professionals. At the same, the metro area's warm weather, moderate costs, and lack of state income tax is luring retirees, and the city's healthcare sector is rapidly expanding to accommodate them.
Las Vegas even has a model for its ambitions some 400 miles to the north in smaller Reno, Nev., which has become an industrial hot spot. In a best-case scenario, Las Vegas tourism recovers even as new industries grow and expand.
"[Las Vegas] will still be a world-class city for leisure, hospitality and gaming, but we need strong secondary industries," says Andrew Woods, director of the University of Nevada Las Vegas' Center for Business and Economic Research. "We're living through a time where states and communities have to make their own destinies."
The Black Fire Innovation institute at the UNLV campus is a success story. It opened in 2020 in collaboration with Caesars Entertainment and has fueled both tech innovation and early-stage start-up companies. Two spinouts include Quantum Copper, commercializing a polymer technology with fire-retardant characteristics that can improve the safety of electric-vehicle batteries, and WAVR Technologies, focused on atmospheric water harvesting -- a key technology in an arid state.
Las Vegas has other wins, too. Air Liquide opened its largest liquid hydrogen production and logistics infrastructure facility in North Las Vegas. Haddington Dynamics is a Las Vegas--based robotics and automation company, and Paysign is a fintech company in neighboring Henderson, Nev.
Las Vegas needs such new players to counter its ailing casino industry. Visitation dropped 7.5% in 2025, the sharpest annual drop since record-keeping began in 1970, excluding the pandemic years. President Donald Trump's aggressive stance toward Canada is part of the problem. The northern neighbor is Las Vegas' biggest foreign market, but those visitors dropped by nearly a quarter last year, or about 200,000 -- the steepest annual decline in half a century, excluding the Covid-19 pandemic. Direct flights from South Korea mean passenger traffic from that country is up by more than a quarter, but those numbers aren't enough to offset the decline.
Overall, 2026 may be another mediocre year: Early estimates had visitation inching up, but considering the war in Iran, high gas prices at home, and headaches at the airport, some of those expected tourists may not materialize.
And Las Vegas is no longer a cheap getaway. In 2025, the average daily room rate was $183.52, up from $132.69 in 2019, and nearly every major hotel on the Strip charges a daily resort fee on top of that. Formerly free perks like parking are now another cost, as are the drinks that used to be complimentary for gamblers.
The casinos are squeezing gamblers to increase their take. Many roulette wheels now feature three zero spaces instead of two, while blackjack tables often offer $6 payouts for every $5 bet rather than the former 3:2 ratio, reducing players' winnings. More than ever, "the odds are against the gambler," says Kevin Gale, co-chief investment officer at wealth management firm Ancora.
Despite that, running casinos hasn't been a great business for a while. Gaming revenue has been basically stagnant for nearly three decades, when adjusted for inflation. And online sports betting is now luring away new customers. The number of 20-something travelers in Las Vegas is roughly half prepandemic levels.
"Virtually every state has gaming now; the younger generation is face-to-phone, busy sports gambling; the trade war is a big hindrance to Canadian tourism; and like everywhere else, the cost of everything has gone up," says Gale. "Las Vegas is being hit with a confluence of multiple things at once."
The pain is reflected in the stocks of casinos, including Caesars Entertainment, Wynn Resorts, and Golden Entertainment. Shares of VICI Properties, the city's major real estate investment trust that owns iconic properties like Caesars Palace and the Venetian, have gone nowhere over the past five years, hurt by a mixed earnings record, concerns about its debt load, and uncertainty about its casino tenants.
Las Vegas has remade itself before. The 2007-09 financial crisis was a wake-up call to the state. The Nevada Governor's Office of Economic Development began operations in 2012 with a mission to create a more sustainable economy and high-paying jobs, and it has made significant progress, says the office's senior director of Strategic Programs & Innovation, Karsten Heise. Wins include the Google data center in Henderson and CAE's state-of-the-art flight training center overlooking Harry Reid International Airport.
Nevada itself should provide a tailwind. The state was the third-fastest growing in terms of new businesses with employees created after the pandemic, with some 7,000 new formations in December 2025 alone, leading to a 12% year-over-year jump in business licensing fees that month.
Allegiant Stadium hosted the 2024 Super Bowl just four years after it was erected to lure the Raiders pro football team to Las Vegas. And the storied Tropicana Hotel on the Strip was demolished to make room for a new baseball stadium for when the Oakland Athletics move to Las Vegas in 2028. NHL hockey is already in town, and NBA basketball is likely to follow.
Healthcare employment in Nevada has doubled over two decades, with another 28% bump projected by 2030. Demographics are on healthcare's side, with one in five people in the Las Vegas suburb of Henderson above the age of 65. Chris Loftus, chief executive of West Henderson Hospital, says that a state bill, SB5, should further boost healthcare in Nevada by recruiting doctors and expediting the credentialing process.
Other solutions can use government help as well. Nevada has potentially the largest lithium deposit in the world, but it has been lagging behind in terms of incentivizing intermediary steps like refining that could provide true vertical integration for local battery and electronics makers.
Skeptics say that Las Vegas can't wean itself from its slots-based economy. Yet in many ways, a framework for transformation exists within its own state, roughly seven hours up Highway 95.
Reno was in such dire straits after the 2007-09 recession that "it felt like we had to diversify and grow or simply accept oblivion as a fate," says Fred Steinmann, director of the University Center for Economic Development at the University of Nevada, Reno's College of Business.
Today, things look different. The region has leaned more into outdoor leisure -- including Lake Tahoe -- while tech and manufacturing have stolen the show. Reno's growing Lithium Loop tech hub includes the Tesla-Panasonic Gigafactory, battery recycler Redwood Materials (begun by a Tesla veteran), and battery maker Dragonfly Energy Holdings, which traces its roots to the University of Nevada campus in Reno.
The collaboration among "companies, the University of Nevada, and the Nevada Tech Hub creates a practical environment to design, prototype, and manufacture," says Dragonfly CEO Denis Phares.
The university is leaning hard into that success. Its College of Engineering is opening a new semiconductor nanofabrication and advanced materials lab, one of just a dozen such U.S. facilities.
Reno has attracted so many companies, and incubated new ones, that its economy is already more resilient, even as its downtown casinos lose business to tribal casinos in Northern California. The city, which took the better part of a decade to fully recover from the 2007-09 recession, reported real gross domestic product of $34 billion in 2023, up from less than $23 billion in 2010 -- and economic growth in Reno's Washoe County is outpacing that of Las Vegas' Clark County for the first time in decades.
A cautionary tale, of course, lies 2,500 miles away in Atlantic City. The famous New Jersey seaside resort town went from credibly calling itself the World's Playground during its 1920's golden age, when it boasted a Ritz Carlton, to being a punchline a few decades later, hurt by corruption and competition. Although it is seeing a modest visitation revival postpandemic, it remains just an echo of its heyday, its downtown hampered by crime and high vacancies.
Las Vegas' world-famous Strip and long history means it's unlikely to suffer that fate -- nor is it likely to swap casinos for semiconductors wholesale. Gaming will endure but increasingly share the spotlight with new businesses, wellness resorts, and professional sports. The popularity of the Sphere entertainment and music area in nearby Paradise, Nev., alongside the rally in Sphere Entertainment, show that there is still a strong appetite for novel, exclusive entertainment. "Only in Vegas" is more than a slogan -- it's a recipe for bringing people back.
It is, however, working to attract new residents, visitors, and businesses alike, a process that's advancing slowly but surely. Clark County is home to multiple Nevada Tech Hub consortium members as well as natural attractions like the Valley of Fire and Red Rock Canyon, so borrowing some lessons from Reno is a feasible way to broaden its economic base.
The casino stocks themselves look dicier, at least until tourism turns around. Caesars' turnaround could come to fruition next year if the company delivers its first annual per-share profit since 2023, but that's a high-risk bet. Likewise, Wynn's Macau business is finally nearing prepandemic levels, spurring growth hopes, though the Iran war is a big question mark over its United Arab Emirates expansion. Nearby Red Rock Resorts casino may be a safer option to play Vegas's population boom, as the new Durango Casino & Resorts caters to more-local crowds and has seen success positioning itself at the higher end of the market.
Betting Las Vegas writ large can make a comeback is a wager worth making. Betting on the gaming stocks may take some patience.
Write to Teresa Rivas at teresa.rivas@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 03, 2026 01:00 ET (05:00 GMT)
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